The Global Demographic Tailwind

[BottomBounce]

Medical Marijuana, Inc. $MJNA international subsidiary HempMeds® Mexico became the first company to have a cannabis-based product, THC-free RSHO-X™, subsidized by a government in Mexico. https://www.medicalmarijuanainc.com/company-of-firsts/first-company-cannabis-products-subsidized-mexican-government/

[DewDiligence]

[Deleted]

[RowingDude]

Good afternoon The Global Demographic Tailwind looking for a strong hour of power!

[DewDiligence]

[deleted]

[DewDiligence]

#msg-60000519 :- )

[DewDiligence]

Chanos vs. China: #msg-56791233.

[DewDiligence]

Housekeeping note: Please read an important message in the iBox of this board.

If you do not see the iBox on your screen, click on the link in the upper left corner of your screen that says, Show iBox (more information).

[n4807g]

I saw that headline and thought, what a great comeback. Watching this quarter for signs the Euro is working against their profitability.

[DewDiligence]

In May 2010, CAT’s worldwide end-user sales were up year-over-year (+11%) for the first time since the summer of 2008:

http://www.reuters.com/article/idCNN1822923420100618

[gym gravity]

I just exchanged my kilo for 20 1oz coins and took the difference in cash... I have to keep with my rules since it was almost a double since I bought it. The chart is at one of those points where bears and bulls are both salivating... if it doesn't go down soon, fast, and hard, the bears will be screwed. Even if it pulls back to 1175, even 1000, the chart is still bullish.

[gym gravity]

Deep Down Provides Update on Its Operations in Gulf of Mexico

(I added shares a few days ago with profits from PBTH)

http://finance.yahoo.com/news/Deep-Down-Provides-Update-on-prnews-4056976580.html?x=0&.v=1

.Companies:Deep Down, Inc.Topics:Industrial Goods.Press Release Source: Deep Down, Inc. On Tuesday June 15, 2010, 12:12 pm
HOUSTON, June 15 /PRNewswire-FirstCall/ -- Deep Down, Inc. (OTC Bulletin Board:DPDW.ob - News) ("DEEP DOWN") is an oilfield services company specializing in complex deepwater and ultra-deepwater oil production distribution system support services.

In response to recent investor inquires, our company today commented that the recently announced 180-day moratorium on exploration drilling in water depths in excess of 500 feet in the Gulf of Mexico (the "Drilling Moratorium") has had no material negative impact on our current operations. However, we have seen an increase in activity in our operations related to cleanup and subsea monitoring in the U.S. Gulf of Mexico.

Additionally, we do not envision that the Drilling Moratorium will have a material impact on the operations of Cuming Corporation. On May 3, 2010, we announced that we had entered into a conditional purchase agreement to acquire Cuming Corporation. Consummation of the transaction remains subject to several conditions which include, among other things, obtaining adequate external financing to fund the approximately $34 million cash component of the purchase price.

Cuming Corporation, which primarily provides buoyancy products for drilling riser systems, had a backlog and signed letters of intent (LOI) of $138 million and $32 million, respectively at March 31, 2010. Recently, the $32 million of LOI's for international projects have become backlog in the form of signed contracts. Over 80% of the Cuming backlog involves drilling vessels that are either contracted for or seeking contracts to work on projects outside the U.S. Gulf of Mexico. Both Deep Down and Cuming continue to bid on deepwater buoyancy product business. We expect that the demand for such products is and will continue to be driven by deepwater exploration and production activity occurring outside the U.S. Gulf of Mexico.

"The impact beyond 2010 of the Drilling Moratorium on our customers' exploration, development and production activities in the U.S. Gulf of Mexico remains unclear, but we continue to monitor and remain actively involved with our customers during this difficult time for our industry. We will continue to support our customers' ongoing operations in the Gulf of Mexico and around the world," stated Ron Smith, Deep Down, Inc. Chief Executive Officer, "and we will continue to provide solutions to meet our customers' needs, for which Deep Down is well known."

About Deep Down, Inc.

Deep Down, Inc. is an oilfield services company serving the worldwide offshore exploration and production industry. Deep Down's proven services and technological solutions include distribution system installation support and engineering services, umbilical terminations, loose-tube steel flying leads, distributed and drill riser buoyancy, ROVs and tooling, marine vessel automation, control, and ballast systems. Deep Down supports subsea engineering, installation, commissioning, and maintenance projects through specialized, highly experienced service teams and engineered technological solutions. The company's primary focus is on more complex deepwater and ultra-deepwater oil production distribution system support services and technologies, used between the platform and the wellhead. More information about Deep Down is available at www.deepdowncorp.com.

Forward-Looking Statements

Information set forth in this document contain "forward-looking statements" (as defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect Deep Down's expectations regarding future events. The forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination transaction involving Deep Down and Cuming, including future financial and operating results, whether and when the transactions will be consummated, the new combined company's plans, market and other expectations, objectives, intentions and other statements that are not historical facts.

The following additional factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the ability to obtain financing and approvals for the transaction; the risk that any synergies from the transaction may not be realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; the ability to successfully integrate the businesses, unexpected costs or unexpected liabilities that may arise from the transaction, whether or not consummated; the inability to retain key personnel; continuation or deterioration of current market conditions; future regulatory or legislative actions that could adversely affect the companies; and the business plans of the customers of the respective parties. Additional factors that may affect future results are contained in Deep Down's filings with the Securities and Exchange Commission ("SEC"), which are available at the SEC's web site http://www.sec.gov. Deep Down disclaims any obligation to update and revise statements contained in these materials based on new information or otherwise.

[DewDiligence]

Booming Crop Exports Spur Farmer-Railroad Rate Fight

http://online.wsj.com/article/SB10001424052748703389004575304970143934734.html

›JUNE 14, 2010
By LIAM PLEVEN

The race to profit from Asia's growing appetite for corn, soybeans and other crops is resurrecting once-dormant disputes between two mainstays of the nation's economy: Farmers and railroads.

Farmers and their allies contend that railroads are taking advantage of their dominance to boost rates for carrying goods to shipping ports. Railroads counter that they have increased rates because of rising fuel and other costs, and say they needed to restore the nation's rail network to financial health.

The two sides are battling over legislation and are embroiled in an increasing array of legal spats that could determine who gets to benefit most from the anticipated surge in exports.

In Congress, farmers, grain merchants and other rail shippers are seeking tougher regulation after the government found freight rates for many crops rose almost 50% from 2003 to 2007. They have won some support: a Senate bill introduced in December would give federal regulators at the Surface Transportation Board new powers to police rates, a bill opposed by railroads.

Two of the biggest names in the business also are duking it out before those regulators. Commodities giant Cargill Inc. has accused Warren Buffett's Burlington Northern Santa Fe of effectively double dipping on fuel charges by including that expense in its base rate, then adding a fuel surcharge. Burlington Northern disputes the claim, which is similar to complaints in a pending lawsuit against railroads by other customers.

At stake are billions of dollars in potential revenue to be earned from an anticipated jump in U.S. crop exports to Asian nations, particularly China. U.S. farmers already send about $20 billion of corn, soybeans and wheat to Asia annually, up from $6 billion a decade ago.

Railroads are well-positioned because in many parts of the country they are the sole mode of transport for getting grains from certain farmland states to coastal ports. It isn't just grains shippers—coal customers and chemical makers also are pushing for changes.

In some cases, railroads are charging more to farmers who are isolated from other economically viable means of transport like barges.

The railroads critics say that is a sign of the industry's pricing power. It costs more to ship corn from Edgeley, N.D., to Seattle on Burlington Northern—$1.18 a bushel—than it does from Hanley Falls, Minn.—$1.17 a bushel. That is even though Edgeley is 185 miles closer to Seattle, according to the railroad. Hanley Falls is far closer to the Mississippi River, making barge shipments to the Gulf Coast a more competitive alternative for farmers there.

Railroads are able to do this in part because of rules established when the industry was deregulated in the early 1980s. In March, 14 state attorneys general called for new rules "to prevent abuse of captive shippers served by a dominant railroad."

Both sides remain financially vulnerable after troubles in recent decades, when many railroads went bankrupt and a farming crisis forced many farmers off the land.

"You had a network that was fragile at best," said John Gray, head of policy and economics for the Association of American Railroads, which lobbies for Burlington Northern and other big railroads. "The situation has improved. … It is getting closer to adequacy."

Many farmers say they are hurt by shipping rates they can't pass on to customers in their own fiercely competitive commodities markets.

"We're price-getters, not price-setters," said Bart Schott, who farms 4,000 acres in Kulm, N.D., and is vice president of the National Corn Growers Association, which is preparing its own study of rail rates. "Every time your expenses go up, it takes away from your bottom line."

Burlington Northern, of Fort Worth, Texas, has a bigger bet riding on crop shipments than most big railroads. It carried 42% of grain shipments in 2007, according to the Agriculture Department, and generated 21% of its revenue from agriculture in 2009. [UNP has similar numbers.] That kind of market position is what enticed Mr. Buffett this year to buy the piece of Burlington Northern that he didn't already own.

Agriculture "has tremendous upside in this country, from an export standpoint," said Kevin Kaufman, who heads Burlington Northern's agriculture business. But, he adds, "Without a viable transportation system, it won't make a difference."

The high stakes in the disputes mean that striking the right balance between railroads and shippers will be critical, said Jason Seidl, a railroad analyst at Dahlman Rose & Co.

Railroads and farmers have been battling over similar issues since the 1800s. The latest round stems in part from the Democratic takeover of the Senate in 2009, when longtime farming ally Sen. John D. Rockefeller (D., W.Va.) became head of the commerce committee.

In December, Sen. Rockefeller introduced a bill that would make it easier to challenge rates before the Surface Transportation Board and let the board launch its own rate probes instead of solely responding to complaints. The bipartisan bill is in its formative stages and it is unclear what the final version could look like.

The Congressional Budget Office said the cost to railroads from the bill "could be substantial."

While railroads raised rates 46% for key crops in the four years ended in 2007, costs for all other commodities rose 32%, according to an April study by the Agriculture Department. The study pinned higher rates on rising railroad costs and infrastructure investments, as well as "billions in merger premiums, which causes higher rates for shippers."

Rates have fluctuated since then. Rates generally rose about 15% in 2008, according to another study, prepared for federal regulators by consultant Laurits R. Christensen Associates.

Preliminary data indicate that rates fell in 2009 amid the financial crisis, the Christensen study found. The report concluded that lowering shipping costs for one group of customers could mean railroads would have to raise the cost to other customers, otherwise it would put the railroads in financial jeopardy.

Burlington Northern made peace with some of the nation's most land-locked shippers in January 2009, agreeing with Montana farmers to arbitrate disputes rather than battle through regulators.‹

[DewDiligence]

GSK Pounces Again in Emerging Markets

[Yet another deal predicated on the attraction of selling branded generics.]

http://www.reuters.com/article/idARN1022854620100610

›Thu Jun 10, 2010 11:55am EDT
By Ben Hirschler

LONDON, June 10 (Reuters) - British drugmaker GlaxoSmithKline (GSK) stepped up its drive into emerging markets with the acquisition of Argentina's Laboratorios Phoenix for $253 million on Thursday.

The latest in a string of deals in developing markets gives Glaxo a portfolio of branded generics covering therapeutic areas such as cardiovascular, gastroenterology, metabolic and urology.

Phoenix also brings Glaxo a factory near Buenos Aires, a primary care sales force and pipeline of additional branded generic medicines.

Emerging markets are the new battleground for the world's top drugmakers as sales stall in Western markets -- and Glaxo has vowed to increase its business, partly by moving into the sale of off-patent branded medicines.

Phoenix had sales last year of around 70 million pounds ($102 million), ranking it number eight in Argentina's pharmaceutical market, while Glaxo's Argentine business had revenue of 100 million. Combined, GSK Argentina and Phoenix would rank third in the Argentine market.

"This is an important step forward in our strategy to grow our business in Latin America -- a key group of emerging markets for GSK," said Abbas Hussain, the company's head of emerging markets. Following the acquisition, GSK Argentina and Phoenix will remain separate legal entities.

Last month, Glaxo agreed to buy a 9.9 percent stake in South Korean group Dong-A Pharmaceuticals) for 73.9 million pounds, the latest of a string of deals designed to increase its share in up-and-coming markets worldwide.

Other deals have included the acquisition of branded generics from both Bristol-Myers Squibb (BMY) and UCB (UCB.BR), as well as product development and distribution deals with Dr Reddy's of India (REDY.BO) and South Africa's Aspen Pharmacare, in which it also has an equity stake. [Also, ABT’s recent acquisition of Solvay Pharmaceuticals.]

The balance of the pharmaceutical market is expected to shift significantly toward emerging markets in the next five years.

IMS Health, a leading provider of prescription drug data, forecasts drug sales growth in leading emerging markets will average 14-17 percent annually, while major developed markets grow 3-6 percent.

Argentina is the eighth largest of the emerging markets for drugs, with a total market value of $3 billion and the third highest growth rate at 22 percent, according to IMS.‹

[DewDiligence]

Morgan Joseph Upgrades DE, Sets $75 Price Target

http://online.barrons.com/article/SB127543265420899749.html

›JUNE 2, 2010
Analyst: Charles E. Mitchell Rentschler

We are raising our rating on Deere (ticker: DE) to Buy from Hold.
Our earnings-per-share estimates for fiscal 2010 (ending Oct. 30) have climbed from $2.25 per share to $3.10 and, now, to $3.80, due to exceptionally strong demand from U. S. row-crop farmers buying combines and tractors, continued brisk business in Brazil, and the emergence of domestic construction-equipment out of a five-year recession.

It is our belief that Deere will earn $5.00 per share next year [i.e. the FY ending Oct 2011], mostly because American farmers (as we have written ad infinitum due to ethanol) are likely to continue to enjoy very high levels of prosperity and to buy "big iron" even if prices go up 4%-5% because of the implementation of "Interim IV" emissions laws.

Evidently satisfied with recent additions to the capacity of its tractor plant in Waterloo, Iowa, and its combine factory in East Moline, Ill., the company is hugely benefiting from mix: the bigger the machine, the more money Deere makes -- it's that simple.

Wealthy American farmers who buy this gear can trade in these machines after two to three years at a percentage loss far less significant than an automobile, given sustained robust after-market demand.

Additionally, while we see no significant improvement in 2011 in Europe (West or East), we believe Deere's construction-equipment sector (90% North American) should see increasing prosperity. And Brazil's farm economy, unaffected by upcoming presidential elections, should remain strong, in our view, due to the favorable outlook for soybeans and cane sugar.

We are setting a price target of $75, or 15 times our 2011 EPS estimate, a multiple justified by historical levels, in our opinion.‹

[DewDiligence]

China’s Weight-Loss Industry Is Gaining

[This article should be read in conjunction with the stories in #msg-49465915, #msg-48221983, and #msg-47908751; the table in #msg-48556414; the bar chart in #msg-40906989; and the sound-bite in #msg-38038167.]

http://www.businessweek.com/magazine/content/10_24/b4182013742927.htm

›Affluence, more sedentary lives, and an increase in processed foods are driving sales of health foods and gym equipment. Bariatric surgery is up too

June 3, 2010, 5:00PM
By Frederik Balfour

As an only child growing up in Shanghai, Simon Wang was plied with dumplings, ice cream, and Kentucky Fried Chicken by his parents and grandparents. After tipping the scales at 220 pounds, the 26-year-old decided to join Weight Watchers last month.

"I will get a heart attack more easily than a normal person," says Wang, who is 5 feet, 9 inches tall and wants to shed 55 pounds. "When I get older I will have lots of problems, maybe high blood pressure and a lot of other illnesses."

After struggling for millennia to feed its population, China, the world's fastest-growing major economy, now faces the opposite problem. Some 30 percent of adults are overweight or obese [and 10% of adults are diabetic—see #msg-48221983], compared with 25 percent in 2004, figures Barry Popkin, director of the Inter-Disciplinary Obesity Center at the University of North Carolina at Chapel Hill. In Beijing, 40 percent of Chinese boys struggle with their weight. Greater affluence, less physical activity, and a diet with more meat and processed food have expanded girths. The problems are most pronounced in cities like Shanghai and Beijing, where more people drive and have easier access to fast food.

The rising rates complicate China's plan to overhaul a health-care system that leaves more than 300 million people without insurance. The government is spending $125 billion to provide coverage for all 1.3 billion Chinese by 2020. The plan includes only basic benefits, not services such as outpatient care for chronic diseases linked to obesity, says Wang Shiyong, senior health specialist at the World Bank in Beijing.

More than 92 million Chinese adults suffer from Type 2 diabetes, caused mainly by a high-calorie diet and sedentary lifestyle, according to a study in the Mar. 25 New England Journal of Medicine. Based on this data, the International Diabetes Federation in Brussels estimates close to half a billion Chinese will have the disease by 2030. The government "is very concerned," says Chen Chunming, professor of nutrition at the International Life Sciences Institute in China, a state-affiliated public-health organization.

Calorie counters like Wang are creating demand for the low-fat foods and weight-loss programs that figure so prominently in the U.S. Sales of soy and fruit bars are growing "really fast, especially to office ladies who are so afraid of gaining weight," said Michael Zhang, chairman of Otsuka (China) Investment. Tokyo-based Otsuka makes the popular Soyjoy bar, which has been available in China since 2008, and Zhang says Soyjoy sales there will overtake those in the U.S. this year. Weight Watchers China, a joint venture between Weight Watchers International (WTW) of New York and Paris-based Danone, the world's largest yogurt maker, opened its first center in Shanghai in August 2008. It has since opened three more there, another in Nanjing, and plans to expand to other cities, according to Shan Jin, director of program development.

The desire to lose weight and achieve "a more healthy lifestyle" are also luring customers for Zhongti Beili Health Club, a joint venture of Bally Total Fitness of the U.S. and Beijing-based China Sports Industry Group, according to the venture's deputy general manager Derek Xue. The company plans to double its chain of gyms to 28 by yearend, he says.

China has about 3,000 health clubs, with about 3 million active members, estimates Marco Treggiari, China managing director of Italy's Technogym. The equipment maker supplies about 400 independent gyms and facilities in 210 five-star hotels. Sales will grow as much as 30 percent this year, to $18 million, he says.

Corporate clients are becoming an important source of that growth. Dow Chemical (DOW) has equipped a 2,600-square-meter sports facility in its Shanghai headquarters with Technogym treadmills and step and weight machines, says Fiona Bao, Dow's medical director for North Asia Pacific. "Obesity is no longer just a personal-health issue. It's related to productivity," she says.

Some Chinese are opting for a quicker fix. Zheng Chengzhu, chief of minimally invasive and bariatric surgery at Changhai Hospital in Shanghai, says he performs about 100 obesity-related operations a year, compared with 20 to 30 a few years ago. Allergan (AGN), maker of a device used in gastric-banding surgery, has applied to the government to sell its Lap-Band in China, says Judy Low, a company spokeswoman in Singapore.

One incentive for a smaller waistline, beyond better health, is the potential to make more money. Wu Yu'e, 23, an engineer who joined Weight Watchers, says employers in China place a premium on physical beauty especially for women. If she slims down, she says she will get a higher-paying job. "It will also help me find a boyfriend," she adds.‹

[DewDiligence]

Global Internet Traffic Will Quadruple by 2014, Says CSCO

[For additional details, see CSCO’s own PR at http://newsroom.cisco.com/dlls/2010/prod_060210.html .]

http://blogs.wsj.com/digits/2010/06/02/cisco-says-data-traffic-from-video-will-eclipse-file-sharing/

›June 2, 2010, 2:06 PM ET

Up and to the right–that’s the shape, once again, of the latest bar chart of global data traffic growth distributed by Cisco Systems. Not surprising, perhaps, for a company that sells hardware to manage such data communications. Yet there are sub-themes worth noting in the annual forecast Cisco issued Wednesday.

One is that there is finally something bigger than file sharing for network operators to worry about. That practice, which grew up around Napster and other services, is based on a peer-to-peer approach that usually involves people sending data directly between their PCs, not downloading files from a central server. P2P file sharing, as it is often called, became a dominant bandwidth hog as consumers started using such services to download illicit copies of movies, software programs and other data files.

Now, Cisco says, traffic from other forms of video distribution–including sites like YouTube and video-on-demand services–will surpass global peer-to-peer traffic by the end of 2010. That will mark the first time in 10 years that P2P did not rank No. 1 among consumers of Internet bandwidth, the company says.

It’s not that file sharing won’t grow; it’s just that video services will grow faster, Cisco says. The company predicts a 22% compound annual growth rate for data traffic from file sharing between 2009 and 2014, compared with 33.1% for consumer video services.

There are several reasons behind the trend. One is simply the rising popularity of Internet video. Another is that some programming that has historically been viewed by consumers through conventional cable networks–which don’t get counted in Cisco’s forecast–is shifting to Internet-based offerings that do get counted. Still another is that a shift to high-definition programming creates vastly larger file sizes.

One of the big wild cards is 3-D. Arguments are raging about how quickly consumers will buy TV sets that can accept such signals–and how fast they will embrace the idea of watching programming that requires them to wear 3-D glasses. Assuming they do, the shift can have a big impact on data traffic because 3-D generates even larger files than high-definition alone.

Suraj Shetty, vice president of Cisco’s service provider marketing, says its forecasts assume relatively tiny penetration of 3-D by 2014. “If it grows at a faster rate, that could have a very sizeable impact,” he says. “If all the video were transmitted in 3-D our overall numbers could increase three-fold.”

To appreciate the overall numbers, it helps to be familiar with the word Exabyte—commonly defined as about 1 quintillion bytes, or a billion gigabytes, and roughly equivalent to the data stored in 250 million DVDs. Cisco projects that global traffic will increase more than fourfold by 2014, amounting to some 767 exabytes of data sent annually (that’s more than three-quarters of a zettabyte, for those keeping score).

To keep the growth in perspective, Cisco notes that the 100-exabyte increase it projects from 2013 to 2014 is 10 times greater than all traffic traversing Internet-protocol networks in 2008.‹

[EZ2]

lots of GREEN TOMATOES there!

[DewDiligence]

Heinz Pours It On in Emerging Markets

http://www.pittsburghlive.com/x/pittsburghtrib/business/s_683358.html

›By Rick Stouffer
PITTSBURGH TRIBUNE-REVIEW
May 28, 2010

The H.J. Heinz Co. on Thursday reported record sales for the year ended April 28, and, while profit declined, the company boosted its annual dividend by more than 7 percent.

The maker of Heinz ketchup, Ore-Ida potatoes and Classico pasta sauce reported net income of $864.9 million, or $2.71 per share, down from $923.1 million, or $2.89 per share, in the previous year. The lower figure was caused by a 29 cents-per-share reduction caused by currency fluctuations and losses from the sale of small, discontinued operations, said Chief Financial Officer Art Winkleblack.

Sales jumped to $10.5 billion from slightly more than $10 billion in the year ended April 29, 2009.

Fourth quarter results were strong, with net income jumping 9.8 percent to $192.4 million, or 60 cents a share, from $175.1 million, or 55 cents a share one year ago. Sales rose 8.3 percent to $2.7 billion from $2.5 billion.

Confident that its sales and profit trends will continue growing, Heinz directors increased the quarterly dividend by 3 cents per share, to 45 cents from 42 cents, effective for shareholders of record on June 24. The annual dividend now stands at $1.80 a share, up 67 percent over the past seven years.

For fiscal 2011 [ending Apr 2011], Heinz projects profit growth of 7 percent to 10 percent, with sales up 3 percent to 4 percent on a constant-currency basis.

"I like the 2011 outlook," said Dan Popowics, a fund manager at Fifth Third Management in Cincinnati, which has $18 billion under management including Heinz shares. "They have solid sales growth, gross margins are up, and they are investing behind their brands and new launches. Currency and the earnings drag are a headwind for the shares."

H.J. Heinz Co. CEO Bill Johnson and his executive team have seen the packaged food makers' future -- and it's located in China, Russia, India and Indonesia.

"Emerging markets are the growth engine for Heinz -- now and into the future," Johnson said Thursday.

"We see…emerging markets to be at least 20 percent of overall sales from continuing operations by 2013; 25 percent by 2016; and 35 percent to 40 percent of total sales long-term."

Johnson kicked off Pittsburgh-based Heinz's day-long investor and analyst day conference presentations by reviewing Heinz's financial results for its fiscal year 2010 and fourth quarter ended April 28, which were released yesterday, then previewed what the new year holds for the company.

For the year just ended, Heinz said sales in emerging markets totaled $1.6 billion, or 15 percent of its record $10.5 billion in sales worldwide, and comprised 100 percent of overall sales growth. That's a jump from 2005, when emerging market sales were 9 percent of total sales.

Heinz defines its emerging markets as Asia/Pacific, Rest of World and the European individual nations of Poland and Russia. Other regions and countries within these markets include Latin America, Indonesia, India, China and South Africa.

Overall for the year, sales outside the United States totaled 62 percent of total sales.

"In Asia/Pacific, sales for the year were $2 billion, the first time ever," said Chris Warmoth, executive vice president of Heinz Asia/Pacific. "We see plenty of opportunities in new product categories and in new emerging market countries."

Keys to growth in emerging markets, according to Johnson, are bigger increases in overseas economies, a rapidly growing middle class in foreign nations, Heinz making acquisitions, and leveraging Heinz's relationships with global fast-food chains such as McDonald's, Wendy's and Burger King.

Executives said the company plans a major upgrade this year to its Ore-Ida brand, which is on track to become a $1 billion business. It plans to build a new innovation center in Holland in 2012. And it will seek to increase ketchup sales in Germany and France.

Heinz intends to use its strong market share in prepared baby food and infant nutrition, plus a strong marketing push to sell infant nutrition products, its fastest-growing food category.

Infant formula in China has started and will reach 450 cities, as it spends $30 million, up from $11 million, to expand, Heinz managing director C.K. Lee told investors. The company's sales team in China will grow from 1,400 to 6,000 to reach a market worth $3 billion.

A similar infant formula product launch in Russia will start later in the year, Johnson said. Heinz reaches 100 million consumers in Russia compared to 25 million in 2008, and it sees Russia as a $500 million business by 2016.

"We're also looking at potential new markets, including the Philippines, Turkey, Vietnam and Brazil," Johnson said. "We see those countries as a natural fit for Heinz."

Heinz, recently opened its first office in Vietnam, Warmoth said.

Heinz intends to continue spending big money to market its products. For the just-concluded year, Heinz spent $438 million on marketing campaigns, up from $269 million four years ago. Johnson said marketing this fiscal year will be at or slightly above the $438 million figure.

"We're also going to significantly increase our involvement with social media, we see that as a way to reinforce our brand equity," Johnson said.‹

[gym gravity]

The weakest point is the headline of your aricle and I have understood that as long as I have held gold (approximately April of 2007 I bought a kilogram.

If there is a "Mad Max Beyond Thunderdome" situation, gold is only worth as much as it takes to fend off the killer looking to take it from you.

Does anyone invested in the STOCK MARKET actually think that it will get that bad? If the economic situation becomes so bad that central banks all decide "fiat is best" what would stocks be worth?

Until then I am going to ride this wave and if it is a bubble I pray I will know when to sell half.

[DewDiligence]

KMB Cuts Ribbon on Russian Huggies Plant

http://www.reuters.com/article/idCNLDE64R1J120100528

›Fri May 28, 2010 11:12am EDT

MOSCOW, May 28 (Reuters) - Kimberly-Clark Corp (KMB) will next week open its first Russian personal care products plant, which will become its biggest in Eastern Europe and allow it to boost exposure to the high-growth market.

The company, known for Kleenex tissues and Huggies diapers, said on Friday its investments in the plant's first phase which will produce diapers has totalled $170 million.

Emerging markets are key for the consumer product makers, as they have largely saturated developed markets like the United States, and local manufacturing allows them to offer more affordable products as they are not subject to import duties.

Kimberly-Clark, whose main rival in the diapers category is Procter & Gamble (PG), said the plant will manufacture products for Russia, Belarus and Ukraine, and would supply other Eastern European markets in the future.

The company began to build the plant in 2008 to support its growing consumer business in Russia and in Eastern Europe, and a local ministry said overall investments in the plant would amount to $490 million.

The factory, which currently employs 200 people, is located in the town of Stupino southwest of Moscow.‹

[DewDiligence]

Gold Is Just Another Fiat Currency

[The author of this piece in Barron’s is the chief investment strategist for First Michigan Bank. The discussion echoes the points made by OakesCS in #msg-50601066.]

http://online.barrons.com/article/SB127508630235098425.html

›MAY 29, 2010
By RICHARD WIGGINS

Perceptions in markets change rapidly, and cash frequently flows in the wrong direction. Today, with television commercials touting gold nonstop, a lot of people are getting all worked up about the rising price of the oldest form of money.

As the price of gold has set records, investors have flooded in to load up on bullion and coin.

Demand for physical gold is projected to rise to 52.3 million troy ounces, the highest in history; and sales of American Eagle gold coins have jumped 65% so far this year, according to the U.S. Mint.

Gold may be the "currency of last resort," but premiums on gold coins have soared to levels never before seen. One-ounce coins are now trading far above their bullion value [a good bubble metric, IMO], as people continue to chase them, and mints worldwide are unable to keep up with demand.

People chase performance: Mutual-fund performance correlates with inflows of new money from investors, but which is cause and which is effect? Money always draws a crowd, and the top-performing mutual funds right now all focus on gold.

The highest concentration of gold holdings has always been central banks and the International Monetary Fund, but some of the biggest hoarders of gold today are the exchange-traded funds, which have bought bullion as they attracted waves of new investors. The SPDR Gold Shares (ticker: GLD), with $37 billion of the yellow metal, is now the world's sixth largest owner of gold.

Even gold bulls you may have seen on CNBC or Bloomberg will admit that there is a $200-$300 premium in gold because of ETF gold funds.

Gold's last real heyday was around January 1980, when Americans were taken hostage in Iran, inflation was out of control and there was civil disorder in Saudi Arabia. That doesn't mean this kind of thing can't happen again, especially since interest rates in this country are dependent on the world's tolerance for allowing America to live beyond its means.

But gold is a special commodity. Virtually every ounce ever mined—whether for use in jewelry or anything else—is still around. It doesn't rust or decay, and we keep mining more each year. It's not like oil, which we use up.

Another part of the logic for gold-that whole flight-to-safety thing—doesn't exist anymore. Maybe once upon a time, gold was a handy way to buy passage out of an oppressive country, but not anymore. When everybody obsessed about gold, and it was highlighted as a great doomsday hedge against inflation and currency risk, financial futures didn't exist. Now they do, so gold is a third-rate safe haven: It pays no interest and costs money to insure. (Textbooks say it has a "positive cost to carry.")

The big argument for gold is that all of the money that the Federal Reserve is printing -- 18 years of easy money -- will come back to haunt us at some time when inflation comes roaring back. Yet if today's investors are worried about U.S. inflation, they can go out and sell T-bonds, or buy the euro or another currency and earn interest while they're doing it. Investors afraid of 1970s-style inflation also should be buying Treasury inflation-protected securities.

It's possible that gold might continue to rise: On an inflation-adjusted basis, gold is far from its peak level of 1980, which was the equivalent of about $2,300 in today's inflated dollars. But it's much riskier now: Where the most money goes, that is where the greatest risk tends to show up. It pours into sectors when they get more and more pricey, and then flees when prices decline.

Wall Street is just a corner of the public mind. It follows fads, so money congregates in outlandish places. In the counterintuitive world that is the investment markets, you don't want to be where the smart money is. You don't want to be "where it's at."

A vital observation of the fun-starved Austrian school of economics is that investors err together, so unanimity of opinion is a danger sign. In past decades there has always an overvalued sector-a steaming corner of the market where money was converging -- and outperformance has come from getting out ahead of the crowd.

- In the 1950s, avoid electronics.

- In the 1960s, avoid franchise restaurants.

- In the 1970s, avoid the Nifty Fifty and fixed income.

- In the 1980s, avoid energy and biotech.

- In the 1990s, avoid Japan and the Internet.

- In the 2000s, avoid real estate and home-building.

All bubbles have nearly identical characteristics. The second half of the 1970s witnessed the outperformance of energy issues. At $30 barrel, oil companies were clearly in fat city. But the gonzo run-up in oil prices that propelled this sector in 1982 contained the seeds for an eventual glut that eventually sent it right back down.

Similarly, gold, which was outside the pale of serious discussion in the 1970s at $35 an ounce, entered the investment mainstream at $600 and $700 an ounce between 1978 and 1980, when it was quadrupling.

Only 15% of gold is used as a monetary metal; the rest of it is used as a commercial metal, and that use, particularly as a corrosion-resistant electrical conductor for semiconductors, is declining. Regrettably, it is a soft, semi-useless metal with very few industrial applications.

Gold is just another fiat currency. The only reason gold is valuable is that we believe it is valuable. Ultimately, this gold bubble ends in tears. When and how far gold's price will decline is anyone's guess, but a smart bet is “sooner rather than later.”‹

[DewDiligence]

Addendum on MON: #msg-50659211.

[north40000]

Deere v. ITC et al.

Some problems that Deere has faced in ~7 years of litigation before ITC

http://www.cafc.uscourts.gov/opinions/09-1016.pdf

[DewDiligence]

This sucks—please see my comment in #msg-50656283.

[EZ2]

MON>>MON repositions Roundup business; cuts FY10 EPS guidance from $3.10-$3.30 to $2.40-$2.60; sees Q3 EPS of 75-80c May. 27

[EZ2]

" I resemble that remark " !!

[DewDiligence]

LOL—you have a one-liner for every occasion :- )

[EZ2]

I 'relish' those type yields!!

[DewDiligence]

That’s a 4.1% yield at the current share price—not bad. HNZ is holding its annual Investor Day webcast today starting at 8am ET.

Webcast slides:
http://heinz.com/data/pdf/Spring2010_HeinzInvestorPresentation.pdf

Access to webcast:
http://www.heinz.com/our-company/investor-relations.aspx

[EZ2]

Heinz lifts quarterly dividend to 45C from 42C

[OakesCS]

i'm in complete agreement w/ regard to your natural resource investment strategy

[DewDiligence]

I would rather own companies that mine industrial metals such as iron ore, where The Global Demographic Tailwind ensures a robust long-term demand irrespective of any changes in investing fashion.

[OakesCS]

i'm not particularly impressed by the graph. The NASDAQ index also had a nice run a few years ago. Then people got all sad and weepy over the dot.com crash.

just as an example of how disingenuous that article is, they imply that Au is still underpriced because it "is still at half the peak set in 1980, after adjusting for inflation". Of course, they fail to mention that 1980 was a bubble and the market crashed in 1982.

There is no shortage of gold as demonstrated by the piles of it sitting around in banks. There is also no lack of capacity to mine it. I'd bet this is a particularly sweet time for mining companies because their equipment costs are not being driven up by competition for manufacturing supply due to high oil, coal, and natural gas prices. In addition, unemployment is high so labor costs are down (it's not like these are highly skilled jobs). I'd be surprised if avg production cost/oz is above $350/oz in the US.

That production is not expanding is probably more a matter of consolidation in the mining industry and their ability to better control the market rather than a diminishing reserve base. However, that doesn't necessarily make Au miners a good investment 'cause I think there profitability is well baked into their prices.

[EZ2]

Gotcha' "board marked" !


But, gotta run and "ketchup" on news!

[DewDiligence]

HNZ was off 2.7% yesterday, which is a big move for such a stable stock. IMO, yesterday’s drop was caused at least in part by investors’ mistaking business exposure to Europe (which HNZ does have) for significant currency risk from the Euro (which HNZ does not have).

HNZ’s European business comes largely from the UK and Russia, two countries that do not employ the Euro.

[gym gravity]

From the USGS report I see production as 2,350mt/52 = 45.2mt/week but I guess the GMFS report has 41.6mt.

this is all that matters though:

[OakesCS]

Speculators are buying gold faster than the world’s biggest producers can mine it

that story is complete BS.

[gym gravity]

I think gold has a few more months in this run and should get about 30% higher...$1500-1600.

edit:

I think the best way to play the game is with DGP, GDX, or GDXJ.

GDX and GDXJ are ETFs on mining companies, the J in GDXJ stands for "junior" so it is smaller companies that will benefit from M&A activity when the price of gold consolidates. Low oil prices and high gold prices benefit miners hugely.

[gym gravity]

"Speculators are buying gold faster than the world’s biggest producers can mine it"

Gold Rising as Euro Weakens Spurs More Speculation

(In my opinion, the pullback from 1249 was just due to euro short covering. Euro/gold is trading inverse just like dollar/gold did from August to December. I expect an unusually strong summer for gold.)

(Update3)
Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Nicholas Larkin, Claudia Carpenter and Millie Munshi

May 24 (Bloomberg) -- Speculators are buying gold faster than the world’s biggest producers can mine it as analysts forecast a 27 percent rally that may extend the longest run of annual gains since at least 1920.

Exchange-traded products backed by bullion added 41.7 metric tons in the week to May 14, the most in 14 months, data from UBS AG show. China, Australia and the 15 other largest mining nations averaged weekly output of 41.6 tons last year, researcher GFMS Ltd. estimates. Even though prices have fallen 4.6 percent to $1,191.65 from a record $1,249.40 an ounce May 14, the median in a Bloomberg survey of 23 traders, analysts and investors shows it will reach $1,500 by the end of the year.

Buying accelerated as the MSCI World Index of 23 developed nations’ stocks tumbled as much as 16 percent since mid-April and the euro weakened to a four-year low against the dollar. Holders of ETPs, including George Soros and John Paulson, accumulated a record 1,938 tons by May 21, eclipsing all but four of the biggest central-bank holdings.

“You could see gold go up another $1,000,” said Evan Smith, who helps manage $2 billion at U.S. Global Investors Inc. in San Antonio and in 2006 correctly predicted that gold would reach $700 within two years. “All of the turmoil and problems we’ve seen in Europe is just another reminder that there’s a lot of value in gold as a safe haven.”

The risk to gold bulls lies in economic growth, which should buoy the prospects of metals linked to industrial demand, such as copper and silver. The world economy will expand 4.2 percent this year, the International Monetary Fund said April 21, raising its January projection from 3.9 percent.

Industrial Metals

Astor Asset Management LLC, with $520 million under management, held as much as 10 percent of its assets in the SPDR Gold Trust, the biggest ETP backed by bullion, according to Bryan Novak, managing director of the Chicago-based company. The firm sold the stake in the first quarter.

China, the biggest consumer of industrial metals, will expand 10.1 percent this year, more than three times the pace of the U.S.’s anticipated 3.2 percent gain, according to as many as 77 economists surveyed by Bloomberg.

“The feeling now is as we move into the expansion phase of economic growth, we want to be diversified in economically sensitive metals,” Novak said. “We’re not negative on the economy now.”

‘Afraid of Debasement’

While gold is favored by investors when the dollar weakens and inflation gains, the metal can also advance at other times. Gold rose 5.8 percent in 2008 as U.S. consumer prices gained 0.1 percent. The metal added 18 percent in 2005 when the U.S. Dollar Index, a measure against six counterparts, advanced 13 percent. Gold rose 8 percent this year as the U.S. Dollar Index jumped 11 percent. U.S. consumer prices dropped in April.

“People are afraid of the debasement of all the currencies,” said Peter Schiff, president and chief global strategist for Darien, Connecticut-based Euro Pacific Capital, whose clients have more than $2 billion in assets. “What’s surprising is that gold is still as low as it is,” he said, predicting $5,000 to $10,000 an ounce in the next five to 10 years.

Since the last week of April, ETPs have been adding bullion at a pace not seen since the first quarter of 2009, in the wake of the collapse of Lehman Brothers Holdings Inc. Buying rose as European policymakers agreed on an almost $1 trillion emergency loan package to prevent sovereign defaults.

Half the Peak

Assets in gold-backed products increased 18.3 tons last week, according to UBS data. The bank revised its estimate for the previous week’s holdings.

Gold is still at half the peak set in 1980, after adjusting for inflation. Then, prices rose to $850, equal to $2,266 today, according to a calculator on the website of the Federal Reserve Bank of Minneapolis.

Supply from mines, which peaked in 2001, fell in five of the last eight years, data from London-based GFMS show. Companies are digging deeper to extract dwindling reserves, with mines in South Africa extending as far as 2.35 miles (3.8 kilometers) down.

Investment, including bars and coins, almost doubled to 1,901 tons last year, exceeding jewelry demand for the first time in three decades, according to GFMS. Jewelry will jump 19 percent to 2,100 tons this year and industrial use 8 percent to 398 tons, Sydney-based Macquarie Group Ltd. says.

Central Banks

Muenze Oesterreich AG, the Vienna-based mint that makes the Philharmonic, the best-selling gold coin in Europe and Japan, on May 12 said it had sold 243,500 ounces since April 26, more than the 205,300 ounces sold in the entire first quarter.

Central banks and governments are also buying gold, adding 425.4 tons last year, for a combined 30,116.9 tons, the most since 1964 and the first expansion since 1988, data from the World Gold Council show. Official reserves of central banks and governments may expand by another 192 to 289 tons this year, according to CPM Group, a research and asset-management company in New York.

The net-long position in Comex futures, or bets on higher prices, is within 13 percent of the record reached in November, U.S. Commodity Futures Trading Commission data show. The most widely held option gives owners the right to buy gold at $1,500 an ounce by December, data from the bourse in New York show.

Economists’ outlook may be too rosy, said Michael Pento, chief economist at Delta Global Advisors in Holmdel, New Jersey, who correctly predicted the 2008 commodity collapse. Some investors judge that a debt crisis in Greece may spread elsewhere in the euro zone, including Spain and Portugal.

Billionaire Managers

“The second half of this year will likely show very anemic growth on a global basis,” he said. “The crisis in Greece is going to spread to Spain and it’s going to be very difficult to deal with. They are bailing out debt with more debt and it isn’t sustainable. It’s a wonderful scenario for gold.”

Billionaire John Paulson’s New York-based Paulson & Co. hedge fund is the SPDR gold trust’s biggest investor, with 31.5 million shares, or about 96 tons, a May 17 regulatory filing showed. Kyle Bass, the head of Dallas-based Hayman Advisors LP who made $500 million in 2007 on the U.S. subprime collapse, bought gold this month, according to a letter to clients.

Buying at the start of a bubble is “rational,” Soros said in January. His New York-based Soros Fund Management LLC was the sixth-biggest investor in the SPDR fund in the first quarter, a May 17 filing with the Securities and Exchange Commission shows. He trimmed his holding by 9.6 percent from the previous quarter.

“People still want a store of wealth,” said Andrew Karsh, co-manager of funds for the Credit Suisse Total Commodity Return Strategy team. “A lot of the fundamentals are still in place.”

To contact the reporters on this story: Nicholas Larkin in London at [e-mail]; Claudia Carpenter in London at [e-mail]; Millie Munshi in New York at [e-mail].

Last Updated: May 24, 2010 18:17 EDT

http://www.bloomberg.com/apps/news?pid=20601087&sid=a6f.XxAJB0Rc

[DewDiligence]

Deere Sees Big Boost from South America

[The Financial Times, a publication that “gets” TGDT, chimes in on DE’s FY2Q10 results.]

http://www.ft.com/cms/s/0/069815c0-6342-11df-99a5-00144feab49a.html

›By Jeremy Lemer
May 19 2010 18:35

John Deere on Wednesday forecast that a surge in spending on tractors and combine harvesters in South America as farmers benefit from improved commodity prices would help drive a sharp rebound in its full-year earnings.

The world’s biggest maker of agricultural equipment now expects sales to grow as much as 13 per cent in 2010 compared with 2009, driving net income to $1.6bn. As recently as February, Deere was expecting sales to increase 6 to 8 per cent, producing profits of $1.3bn. While analysts noted that Deere’s previous forecasts were conservative, the upgrades also point to improvements in the global economy that are driving increased demand for agricultural commodities.

Should the revised estimates prove accurate, they would mark a substantial recovery from Deere’s 2009 lows when full-year net income fell by more than half to $873.5m compared with 2008, on sales down 18 per cent to $23bn.

Like many of its peers, Deere is banking on emerging markets for growth. Brazil and Argentina are expected to perform well because prices for key crops such as soybeans and sugar cane are high, making farmers more willing to buy equipment.

Deere raised its forecast for sales of agricultural equipment in South America and now expects a 25 per cent growth spurt compared with 2009 levels. Its previous forecast predicted 10 to 15 per cent growth.

North American equipment sales, which make up about 55 per cent of revenues, will still play a key role in driving growth as “healthy farm cash receipts, solid commodity prices and low interest rates” push farm machinery sales up 5 to 10 per cent for the year.

For the three months to the end of April, Deere’s net income was $547.5m, or $1.28 per share, as farmers in North America bought more equipment at higher prices and sales of forestry kits rebounded. In the same second quarter period in 2009, net income was $472.3m, or $1.11 per share.

Profits were helped by better pricing, foreign exchange movements and lower raw-material costs. The US healthcare reform legislation that passed earlier in the year however led to a $129.5m tax charge.

Second quarter sales rose 6 per cent to $7.1bn, but 4 percentage points of that was due to currency translation effects. Analysts expected Deere to report earnings of about $1.07 a share on sales of $6.6bn for the period.

The construction and forestry sector was the standout, with sales jumping 52 per cent to $911m.‹

[DewDiligence]

Proving that you can’t please everyone, here’s an analyst who is worried about DE’s blowout results:

http://finance.yahoo.com/news/Deere-profit-tops-rb-1080801047.html?x=0&.v=6

Alex Blanton, an analyst at Ingalls & Snyder who has been covering the U.S. manufacturing sector for four decades, applauded Deere's apparent success in controlling costs [apparent?], eliminating waste and making its manufacturing operation more efficient…

"I'd say their forecasting isn't very good," Blanton said. "Or maybe they're just playing a game: underpromise, overdeliver. The problem with that is if people catch on to that, then they start raising their numbers above your guidance because they know you're low-balling. Then one day you don't lowball and look out."

:- )

[DewDiligence]

DE Reports (Blowout) FY2Q10 Results

[Deere not only beat analysts’ FY2Q10 consensus estimates—it blew them away! According to the company, this was the second-best fiscal second quarter in the company’s long and storied history. EPS was $1.28 (+15% YoY), and it would have been $1.58 (+43% YoY) if not for a $0.30 non-recurring charge due to tax changes from healthcare reform (a/k/a ObamaCare). The 43% increase in recurring profit came from a 6% increase in YoY sales (0% from volume, 2% from pricing/mix, and 4% from currency). This shows the enormous operating leverage DE is getting from cost-cutting during the prior recession.

More important than the surprisingly good FY2Q10 results is the bullish outlook for FY3Q10 and the full fiscal year ending 10/31/10. DE now expects FY3Q10 sales to increase 21-33% YoY (almost entirely from volume!) and full FY2010 sales to increase 11-13% YoY (6.5-8.5% from volume, 1.5% from pricing/mix, and including 3% from currency). (Note: the above sales numbers are for equipment sales only—i.e. they exclude sales booked by DE’s unconsolidated finance subsidiary.) FY2010 GAAP profit is now expected to be $1.6B; with 429M diluted shares, this equates to FY2010 GAAP EPS of $3.73 (up from the prior guidance of $3.04, which was raised from $2.10 only three months ago!) and FY2010 non-GAAP EPS (excluding the $0.30 hit from ObamaCare) of $4.03.

At the current share price ($58.73), DE’s P/E based on FY2010 non-GAAP EPS is 14.6x. This strikes me as cheap for company that’s the world’s leading vendor of ag equipment and a major beneficiary of The Global Demographic Tailwind. Moreover, DE’s FY2010 guidance is based on a relatively conservative outlook for US farming, as can be seen from CC slides 9-11 (see below).

DE’s FQ2Q10 financial tables are at http://www.deere.com/en_US/ir/media/pdf/financialdata/reports/2010/2010_secondquarter.pdf and the CC slides are at http://www.deere.com/en_US/ir/media/pdf/financialdata/reports/2010/2010_secondquarter_confcallslides.pdf .]

http://www.deere.com/en_US/ir/financialdata/2010/secondqtr10.html

›MOLINE, Illinois (May 19, 2010) –

• Income climbs 16 percent on 6 percent gain in net sales and revenues.

• Results aided by strong demand for large farm machinery and higher shipments in construction and forestry.

• Quarterly earnings include approximately $130 million tax charge related to U.S. health-care legislation; earnings would have been $677 million, or $1.58 share, excluding charge (see appendix).

• Earnings forecast for year increased to $1.6 billion.

Net income attributable to Deere & Company was $547.5 million, or $1.28 per share, for the second quarter ended April 30, compared with $472.3 million, or $1.11 per share, for the same period last year.

Affecting second quarter results was a tax charge of $129.5 million, or $0.30 per share, due to the previously announced impact of the enactment of U.S. health-care legislation. Without this item, earnings for the quarter would have been $677.0 million, or $1.58 per share. (Information on non-GAAP financial measures is included in the appendix.)

For the first six months of the year, net income attributable to Deere & Company was $790.7 million, or $1.85 per share, compared with $676.2 million, or $1.60 per share, last year. Six-month results also were affected by the tax charge.

Worldwide net sales and revenues increased 6 percent, to $7.131 billion for the second quarter [including the unconsolidated finance subsidiary] and were up 1 percent to $11.966 billion for six months. Net sales of the equipment operations were $6.548 billion for the quarter [this is revenue excluding the finance subsidiary] and $10.785 billion for six months, compared with $6.187 billion and $10.747 billion for the corresponding periods last year.

"We're proud of John Deere's strong results, reflecting a disciplined approach to cost and asset management and the solid execution by employees of our business model," said Samuel R. Allen, chairman and chief executive officer. "These actions are helping us extend our competitive advantage and fully capitalize on improving business conditions." Sales of large farm machinery, particularly in the United States and Canada, are making a significant impact on the company's performance, Allen noted, while construction and forestry shipments are rebounding from historic lows.

Summary of Operations

Net sales of the worldwide equipment operations increased 6 percent for the quarter and were essentially unchanged for six months compared with a year ago. Sales included a favorable currency-translation effect of 4 percent for the quarter and 5 percent for six months and price increases of 2 percent for both periods. Equipment net sales in the United States and Canada increased 4 percent for the quarter and declined 1 percent year to date. Outside the U.S. and Canada, net sales were up 9 percent for the quarter and 2 percent for six months, with favorable currency-translation effects of 9 percent and 10 percent for these periods.

Deere's equipment operations reported operating profit of $988 million for the quarter and $1.303 billion for six months, compared with $628 million and $935 million last year.

Results were higher in the quarter primarily due to improved price realization, the impact of higher production volumes, the favorable effects of foreign exchange and lower raw-material costs, partially offset by higher postretirement benefit costs. Six-month results were higher due to lower raw-material costs, improved price realization and the favorable effects of foreign exchange, partially offset by higher postretirement benefit costs and the impact of lower shipment and production volumes.

Net income of the company's equipment operations was $454 million for the quarter and $623 million for six months, compared with $406 million and $560 million for the respective periods last year. The same operating factors mentioned above, along with a higher effective tax rate, affected both quarterly and six-month results. The higher tax rate was mainly due to the tax charge associated with the enactment of U.S. health-care legislation.

The company's focus on disciplined asset management continued to produce solid results. Trade receivables and inventories ended the quarter at $7.017 billion, representing a reduction of $907 million, or 11 percent, from a year ago. Trade receivables and inventories at the end of the quarter were equal to 34 percent of previous 12-month sales compared with $7.924 billion, or 32 percent of sales, last year.

Net income of the company's financial services operations was $86.9 million for the quarter and $172.0 million for six months compared with $68.9 million and $115.8 million last year. Results were higher for both periods primarily due to improved financing spreads, a lower provision for credit losses, growth in the credit portfolio and higher commissions from crop insurance. These factors were partially offset by lower tax credits related to wind energy projects and higher selling, administrative and general expenses.

Company Outlook & Summary

Company equipment sales are projected to be up 11 to 13 percent for fiscal 2010 and up 21 to 23 percent for the third quarter compared with the same periods a year ago. Included is a favorable currency-translation impact of about 3 percent for the year and about 2 percent for the quarter. For the full year, net income attributable to Deere & Company is anticipated to be approximately $1.6 billion. This amount includes the tax charge of approximately $130 million related to U.S. health-care legislation. [This equates to FY2010 GAAP EPS of $3.73 and non-GAAP EPS (excluding the $0.30 hit from ObamaCare) of $4.03.]

According to Allen, a consistent investment in advanced new products and expanded global capacity is helping the company benefit from an improving economy and puts it on a strong footing for the future. "In our view, John Deere is exceptionally well-positioned to help meet the world's increasing need for farm commodities and other renewable resources as well as for shelter and infrastructure," Allen said. "We're confident these developments hold sustainable promise, which supported by our advanced new products, technologies and well-regarded distribution channel, should continue delivering value to our customers, investors and other stakeholders."

Equipment Division Performance

• Agriculture & Turf. Sales increased 1 percent for the quarter largely due to the favorable effects of currency translation and improved price realization, partially offset by lower shipment volumes. Sales were down 2 percent for the six months primarily due to lower shipment volumes, partially offset by the favorable effects of currency translation and improved price realization.

Operating profit was $952 million for the quarter and $1.304 billion year to date, compared with $703 million and $993 million last year. Operating profit was higher in the quarter primarily due to improved price realization, the impact of higher production volumes, the favorable effects of foreign exchange and lower raw-material costs, partially offset by higher postretirement benefit costs. Six-month operating profit was higher largely due to lower raw-material costs, improved price realization and favorable foreign-exchange effects. Partially offsetting these factors was the impact of lower shipment and production volumes and higher postretirement benefit costs.

• Construction & Forestry. Construction and forestry sales were up 52 percent for the quarter and 15 percent for six months mainly due to higher shipment volumes, favorable currency-translation effects and improved price realization. The division had operating profit of $36 million for the quarter and an operating loss of $1 million for six months, compared with last year's operating losses of $75 million in the quarter and $58 million for six months. The improvement in both periods primarily was due to higher shipment and production volumes and improved price realization, partially offset by higher postretirement benefit costs.

Market Conditions & Outlook

• Agriculture & Turf. Worldwide sales of the company's agriculture and turf division are forecast to increase by 9 to 11 percent for full-year 2010, with a favorable currency-translation impact of about 3 percent. Deere's sales are benefiting in particular from strong demand for large tractors and combines.

With support from healthy farm cash receipts, solid commodity prices and low interest rates, industry farm-machinery sales in the United States and Canada now are forecast to be up 5 to 10 percent for the year. In other parts of the world, industry sales in Western Europe are forecast to decline 10 to 15 percent for the year due to general weakness in the livestock, dairy and grain sectors. High levels of used equipment also are weighing on Western European markets. Sales in Central Europe and the Commonwealth of Independent States are expected to remain under pressure as a result of challenging economic conditions. In South America, industry sales are projected to increase by about 25 percent due mainly to improvement in the key Brazilian and Argentinean markets. Conditions in Brazil are receiving support from favorable prices for soybeans and sugarcane and from attractive government-supported financing. The farm economy in Argentina is benefiting from commodity prices and a return to more normal weather conditions.

Industry sales of turf equipment and compact utility tractors in the United States and Canada are expected to be up 5 to 10 percent for the year.

• Construction & Forestry. Deere's worldwide sales of construction and forestry equipment are forecast to increase by about 30 percent for full-year 2010. Sales are benefiting from low inventories, associated with last year's aggressive production cutbacks, and more-steady market conditions. Though remaining depressed as a result of declining non-residential construction and relatively high used-equipment levels, U.S. construction-equipment markets are showing signs of stabilization. Global forestry markets are improving from last year's extremely weak levels, driven by higher worldwide economic output and somewhat-higher U.S. housing starts.

• Credit. Full-year 2010 net income attributable to Deere & Company for the credit operations is forecast to be approximately $300 million. The forecast increase from 2009 is primarily due to more favorable financing spreads and a lower provision for credit losses, partially offset by higher selling, administrative and general expenses.

John Deere Capital Corporation

The following is disclosed on behalf of the company's credit subsidiary, John Deere Capital Corporation (JDCC), in connection with the disclosure requirements applicable to its periodic issuance of debt securities in the public market.

Net income attributable to John Deere Capital Corporation was $69.4 million for the second quarter and $133.4 million year to date, compared with $33.9 million and $69.0 million for the respective periods last year. Results were higher for both periods primarily due to improved financing spreads, a lower provision for credit losses and higher commissions from crop insurance, partially offset by higher selling, administrative and general expenses.

Net receivables and leases financed by JDCC were $19.818 billion at April 30, 2010, compared with $19.292 billion last year. Net receivables and leases administered, which include receivables administered but not owned, totaled $19.922 billion at April 30, 2010, compared with $19.455 billion a year ago.‹

[gfp927z]

Webster Tarpley explains the globalist's strategy in Middle East/Central Asia -

[DewDiligence]

ABT’s acquisition of an Indian drug company today (for what seemed on a cursory inspection to be a steep price) is a textbook play on The Global Demographic Tailwind. Here are some references:

#msg-50436738 ABT PR announcing the acquisition
#msg-50438863 Factoids on the Indian drug market
#msg-50473238 India’s fake drugs are a real problem

The third entry above is a must-read, IMO.

[DewDiligence]

KMB Launches Huggies Little Movers Jeans Diapers

[This is a great time for a product launch insofar as archrival PG is preoccupied with fending off an internet smear campaign for Pampers (#msg-49838567).]

http://finance.yahoo.com/news/KimberlyClark-Introduces-prnews-2789612680.html?x=0&.v=1

›Denim-Inspired Diaper First of Its Kind in U.S. Market; Introducing Fashion Within the Diaper Category

May 20, 2010, 6:00 am EDT

DALLAS, May 20 /PRNewswire-FirstCall/ -- Kimberly-Clark Corporation (NYSE:KMB) today announced the nationwide availability of the limited edition Huggies Little Movers Jeans Diapers – a unique, fun and stylish denim-inspired fashion for babies during the summer months.

The new diaper is the first of its kind available in the United States and is available nationwide for a limited time from June through July 2010, where diapers are sold.

"Jeans have always been a Mommy fashion must-have, but now it's time for their little ones to steal the style," said Stuart Schneider, senior brand director of Huggies. "The design helps babies stay trendy while keeping dry with the same revolutionary design and proven leakage protection that moms have come to know and trust from the Huggies brand."

Huggies Jeans Diapers feature a fashionable blue denim design, providing parents and little ones everywhere with a trendy way to express their personal styles. First launched in Israel in 2007, Huggies Jeans Diapers have been a success in more than 20 countries around the world including Russia, South Korea, Mexico, Singapore and many more.

"Following the success of our global Huggies brand teams, we're inviting consumers to engage with the Huggies brand in the same way they would engage with a fashion brand they love," said Schneider. "From baby fashion shows to celebrity partnerships, we're challenging moms to look at diapers in a whole new way."

The release of the fashion innovation in North America will include a comprehensive integrated marketing program that will stop moms in their tracks and inspire them to purchase Huggies Jeans Diapers. Utilizing the same tactics as a fashion brand, the team is incorporating a mix of marketing elements that include fashion shows, celebrity partnerships, social media, public relations, digital and e-commerce partnerships, TV, mall and Internet advertising, as well as highly visible and unique in-store displays and cross promotions.

Huggies Jeans Diapers are available in three sizes, from size 3 (16-28 lbs) through size 5 (over 27 lbs) for a manufacturer's suggested retail price of $9.59 for a jumbo pack and $19.99 for a big pack (diaper count varies based on diaper size).

About Kimberly-Clark

Kimberly-Clark and its well known global brands are an indispensable part of life for people in more than 150 countries. Every day, 1.3 billion people – nearly a quarter of the world's population – trust K-C brands and the solutions they provide to enhance their health, hygiene and well-being. With brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend, Kimberly-Clark holds the No.1 or No. 2 share position in more than 80 countries. To keep up with the latest K-C news and to learn more about the company's 138-year history of innovation, visit www.kimberly-clark.com.‹

[DewDiligence]

Several new posts today on MON, which is IMO the premiere long-term beneficiary of The Global Demographic Tailwind. I double-posted the following items on the Biotech Values board and the MON board (#board-6650); the links below point to the entries on the Biotech Values board.

#msg-50378397 Bullish report from Morgan Joseph
#msg-50376492 Market-share gains in Brazil and Argentina
#msg-50378314 FDA grants GRAS status to Vistive® soybeans

Comments?

[DewDiligence]

UTX Sees Order Pickup During 2Q10

[This is a rather tepid statement insofar as the company did not actually raise EPS guidance, but every little bit helps in this market.]

http://www.reuters.com/article/idCNN1815622920100518

›Tue May 18, 2010 12:46pm EDT

BOSTON, May 18 (Reuters) - United Technologies Corp <UTX.N> is experiencing a pickup in orders during the second quarter, which may allow it to top Wall Street's earnings expectations, the diversified U.S. manufacturer's top executive said.

"Current order rates give us confidence" in second-quarter results, Chairman and Chief Executive Louis Chenevert told an investor meeting in Florida. "We expect Q2 EPS to be better than expected as organic growth resumes."

The global economy is in a "gradual, but certain recovery," he said.

The company's Carrier air conditioner unit, which tends to receive orders on shorter notice than some of its aerospace divisions, is seeing a particular rise in orders, Chenevert said.

The Hartford, Connecticut-based company is confident in its full-year earnings target of $4.50 to $4.65 per share, Chenevert said.

The world's largest maker of elevators and air conditioners does not provide a quarterly forecast, but analysts on average look for second-quarter earnings of $1.16 per share, according to Thomson Reuters I/B/E/S.‹

[DewDiligence]

LED talk is heating up (but only a little since LEDs don’t use
much energy ) The bottomost paragraph is key, and the chart
in #msg-46894239 puts all this in context.

http://www.nytimes.com/2010/05/17/technology/17bulb.html

›LED Bulbs for the Home Near the Marketplace

May 16, 2010
By ERIC A. TAUB

The prospects of replacing today’s inefficient incandescent light bulbs with long-lasting, low-power LEDs are increasing.

Two of the lighting industry’s three biggest manufacturers, Osram Sylvania and Philips, plan to sell energy-efficient LED bulbs this year that can replace a 60-watt bulb, the most commonly used incandescent lamp.

The third company, General Electric, will sell an LED equivalent to a 40-watt bulb this year, but it will not have a 60-watt replacement ready until 2011.

Beginning in January 2012, federal law will require that light bulbs, or lamps as the industry calls them, will need to be 30 percent more efficient than current incandescent bulbs. Standard incandescent lamps will most likely not be able to meet those requirements. LED makers hope their bulbs will.

Compact fluorescents have been unpopular with consumers, and LED bulbs have been too dim. But Osram’s Ultra bulb, available in August, and Philips’s EnduraLED, which will be in stores in the fourth quarter, will use just 12 watts of power to equal the light output of a 60-watt bulb.

“The 60-watt lamp is the most-sold bulb in America,” said James R. Brodrick, the manager for solid-state lighting at the Energy Department. “These new bulbs should give consumers something to think about.”

The LED bulbs use 20 percent of the power of a current incandescent bulb and last up to 25,000 hours, compared with 2,000 hours for a standard bulb and 8,000 for a compact fluorescent. That’s 17 years if the bulb is on four hours a day.

The companies say that, unlike compact fluorescents, these new LED lights completely mimic standard bulbs. They are dimmable, create light in all directions, and display virtually the same warmth and range of colors as incandescent bulbs. And most important, they work.

“In our research, we mixed up these new LED lamps with regular bulbs, and when asked which was which, most selected the wrong lamps,” said Guido van Tartwijk, a Philips group manager.

Unlike earlier versions, the new LED lamps look more like common light bulbs. The first products were heavy, with other-worldly metal fins attached to dissipate heat. Makers have now shrunk the fins and better incorporated them into the design.

The major players are eager to begin selling the replacement lights, so people do not sour on LED lamps the way they did when poorly made compact fluorescents were first sold. Early compact fluorescents were plagued with harsh white light and short life. Those bulbs also contain tiny amounts of mercury.

“Some early LED lamps have performed so poorly we’ve removed them from the market,” Mr. Brodrick said. This October, G.E. will introduce Energy Smart, its 40-watt LED equivalent that uses 9 watts of power; a 60-watt equivalent will be announced in a few months.

“We decided to come out with a 40-watt lamp first so that we can meet Energy Star specifications,” said Steven J. Briggs, a vice president for marketing at GE Lighting. [This is a lame attempt to explain GE’s being third in a 3-horse race.] “We want to make best-in-class products.”

With the major players about to enter the LED market with products aimed at consumers, the big question shifts from quality to price. GE expects its 40-watt equivalent to cost $40 to $50, while both Osram Sylvania and Philips think initial retail prices could be about $60.

A lesser-known maker based in Satellite Beach, Fla., the Lighting Science Group, has said that its new 60-watt equivalent, Definity LED, will also be available later this year and cost around $30.

All three major companies say they are working with regional utilities to offer rebates that could lower the price to something that could immediately be affordable.

“By 2012 or 2013, we’ll get the price down to around $20,” said Mr. van Tartwijk of Philips.‹

[DewDiligence]

Cisco’s Slide Offers Opening for Investors

[CEO John Chambers said FY3Q10 was probably the best quarter in the company’s history (#msg-50109571), but the stock sold off almost 5% yesterday. Go figure.]

http://www.forbes.com/2010/05/13/cisco-systems-technology-markets-equities-networking-computer.html

›by Carl Gutierrez
05.13.10, 4:45 PM ET

Cisco Systems' fiscal third-quarter results left the market confused, leading its stock to slide Thursday. But the drop presents a buying opportunity for investors as the computer networking equipment maker is well positioned for strong broad-based growth.

"Things look very solid, fundamentals are improving, and the large-cap technology company has more cash than Intel and Google combined," says Brent Bracelin, analyst at Pacific Crest Securities, "and the company right now with the sell-off today is essentially trading at 13 times earnings for 2011."

Bracelin adds that he considers the sell-off a great opportunity for the long-term investor in Cisco Systems. "Our thesis is we have a mulit-year opportunity in front of us," he says. "If you look at the large installation-base out there, that's five-plus years old and in the next six to 24 months a lot of that equipment will need upgrading."

Despite posting stronger-than-expected results, the computer networking equipment maker saw its shares slide 4.5%, or $1.21, to close at $25.53, Thursday in the wake of the report’s release on Wednesday. There wasn't one metric or comment that led to investor skittishness, Bracelin says, instead the only confusion is the benefit of the extra week they had in the April quarter. [CSCO is one of a few companies in the S&P 500 that has a 53-week fiscal year every few years.] "Investors were concerned if the extra week would be a potential headwind and some were left the impression that demand is potentially slowing for Cisco, when that’s not the case," he says.

It wasn’t as if Cisco Chief Executive John Chambers was shy about his enthusiasm when the company issued its results. “We witnessed a return to strong balanced growth across geographies, products and customer segments that we haven't seen since before the global economic challenges began,” he said upon the release. “It is clear that our game plan for how to handle economic downturns is hitting on all cylinders.”

For the quarter, the company reported a 69.2% jump in earnings to $2.2 billion, or 37 cents per share, from $1.3 billion, or 23 cents per share, reported in last year's corresponding period. Excluding one-time charges and other costs, the company's earnings reached 42 cents per share. Wall Street analysts, on average, had expected earnings of 39 cents per share. Sales meanwhile rose 26.8% to $10.4 billion, from $8.2 billion.

Cisco's drop, though, wasn't unique to the technology sector, as fellow firms Hewlett-Packard slid 1.5%, Microsoft 0.7%, Apple 1.7% and IBM 0.7%. Google proved to be an exception, as it rose 1.1%. The Technology SPDR exchange-traded fund fell 1.3%, or 31cents, to $22.88.‹

[DewDiligence]

Thanks, mouton.

The second of these two links is a website for the Xeroderma Pigmentosum Society; XP is a disease where exposure to UV light can be fatal, so this is a real issue for them.

Sufferers of this disease presumably can’t go outdoors, except at night. What do they do about doctor’s appointments?